4Sight Managing Director, Garry Adamson, gives an insight into the growing importance of aggregated data in the world of sponsorship and advertising…
For years, the key goals of CRM in sport and leisure have been focused on the usual suspects…sales increases, loyalty, cost reduction and profit improvement. The income target is usually developed from an anticipated increase in B2B and B2C spend from improved data driven, targeted sales and marketing. These objectives are crucial and the benefits in these areas will form the major part of the development of the initial CRM programme business case.
However, one often overlooked benefit is the potential for significant increases in the value of sponsorship and partnership income. In a world where rights holders need to work much harder to demonstrate commercial value to their partners, this element has the potential to become an even greater source of return than those previously mentioned.
For many years, any sponsorship deal with a rights holder was regarded pretty much as a charitable donation. The name on the shirt became the end in itself and there was little of what is now known as ‘activation’ or measurement.
As sport, especially football, has evolved commercially in the past 15 years, so has the size of the sponsorship deals that have been achieved. This has brought greater demands from partners in terms of the measurement of the return on investment from rights holder. The result has been a major increase in the recruitment of sponsorship activation personnel and subsequently a greater increase in related activities.
This expected return on investment has now extended into the club’s CRM & Data strategy. Potential sponsors are keen to know that not only will they achieve the traditional objectives of media awareness but that the potential audience of customers is well managed, understood and has the ability to be engaged with. Simply put, the more quality data a rights holder has the greater the value which could be derived from the deal.
Therefore, the potential power of offering a data driven partnership is large…even more so if the data is aggregated across a number of clubs or leagues.
The benefits of such an approach appear to be a genuine case of 2+2 = 5!
Aggregated data across a league or a group of clubs, offers sponsors a chance to have access to a much larger pool of customers that generally have similar valued characteristics. This is extremely attractive to sponsors and with the latest technology also allowing individual clubs to view only their own data, this offers the best of both worlds, i.e. club owned data for their own purposes and a ‘rolled up’ version of the data to be managed by the collective.
The key benefits from this ‘aggregated’ approach are many and include:
- Efficiencies – sponsors and partners need only deal with one source of data when communicating with customers rather than multiple systems and sources. The individual clubs can also utilise a service from the group or league to manage their data and therefore each individual club can benefit from the economies of scale that comes with that approach.
- Profiling – a large base of customers can be profiled and segmented more easily as there is a larger amount of ‘base’ data to work from, offering a much improved statistical sample. This profiling can be based around the transactional and behavioural characteristics as well as more sophisticated lifestyle groupings such as MOSAIC or ACORN.
- Cost Saving – individual clubs can tap into the larger source of data to provide their own data/CRM needs where necessary and benefit from a much lower cost than if they had purchased their own individual solution.
- Larger pool of potential partners – having access to a larger, more profiled group of customers means that centralised deals can be struck for larger amounts to partners who may not have considered working on an individual club level. This brings larger potential sponsors into play for smaller clubs.
- Improved measurement and evaluation - the aggregated approach allows for a new measurement process to be implemented that measures success. Traditionally, media evaluation has been the way that sponsorship success is measured but this is flawed as it only reports on the comparable value of the equivalent advertising rates rather than real sales. A centralised data driven option which can prove much more accurate is to assess how many fans appear on the sponsors database at the start of the partnership and re-assess on a regular basis. The aim will be to increase the penetration of fans from the rights holder’s data within the sponsor’s customer base. This equates to real sales and is a much more appropriate measure which we expect to become more prominent in the future. It could also be used to allocate a share of the revenue to each individual club based on the take up of their fans for the sponsors offer. This in itself would drive the behaviours at club level to increase their focus on data collection and support the activation of the partnership.
So, if there are so many benefits then where’s the catch?
There isn’t one! Except it’s safe to safe that as per any CRM or data project then the necessary rigour and discipline needs to be put into place to deliver it successfully. Commitment is required at all levels and a genuine belief from all parties along the way, with an understanding and buy in to the benefits available. There also needs to be trust that each individual club’s data is not compromised.
The other key question involves how clubs can tap into an aggregated approach. Generally it will be through their league structure who are the prime candidates to lead such a project. However, if this is seen as too much of a challenge then clubs can form partnerships with other clubs in their region or based on other similar characteristics (e.g. college teams in the USA). These groupings can then leverage the benefits that the new technology can bring.
From a pragmatic perspective, clubs will also need to work on their data in order to make it worthwhile in the first place. Only those clubs with a reasonable sized database which is maintained to a decent standard will be legitimate candidates to join an aggregated solution. Here are some steps to follow to become ‘sponsor friendly’ and demonstrate commitment to the wider group:
1. Grow the Data
Use measurement to help increase the focus within the business to drive the quantity of customers within the database. Include data measures as a KPI within the business along with targets for all key staff which include incentives. Experience suggests that this will immediately drive a change in behaviour and an increase in data quantity. If you don’t measure it, staff will not believe you think it’s important!
2. Basic Profiling Ability
Focus on building contact and transactional data initially, which can then be used to profile based on behavioural and geo-demographic information. Sponsors want to know that you are able to contact your dataset easily and also understand the basic information about them.
3. Enhanced Profiling
Once the basics are in place then a profiling tool can be applied to add extra information and aid greater insight. MOSAIC is the most popular lifestyle classification tool and is an ideal method to build further insight into customer and fan groups. It is used regularly in advertising and politics as the MOSAIC groups each have clear characteristics about their likely lifestyle choices, meaning it’s much easier to target them with those products and services they are interested in and through their preferred communication methods. This can be used to build profiles and flag those against the customer record within the CRM database for future reference and results reporting.
4. Communications Preferences
The traditional method of allowing possible sponsors to contact a club’s database is to ensure that as many fans as possible have signed up to the ‘allow 3rd party’ section in their communication preferences. However this method can also be a reason for fans not providing their details as they fear being bombarded by perceived spam emails from companies they are not interested in.
This model must change.
With a large database of engaged fans where the data is well managed and insightful, a new model is emerging from which CRM practitioners should be aware. If fans believe that they will be provided with relevant information about products and services that they are interested in then they are more likely to sign up. To do this, use a preference manager tool to find out more about the key products and services they are keen to know more about, especially where there is a chance of extra value in a possible deal. These categories would typically include car dealerships, mobile phone providers and financial services. By opting in to specific sectors, extra value can be generated by linking these people to local partners who see a much bigger attraction in communicating with a smaller group of fans that have given their permission to be contacted.
5. Contact Management Strategies
To support the overall objectives and the achievement of a new value partnership between sponsors and fans, it is essential that their interests and preferences are captured. i.e. when you send an email to the supporter base asking about their interests, favourite player etc… it is much easier to manage the results if this information flows straight back to the customer record. The preference manager survey is an often over looked approach and is much simpler and more accurate than building propensity models trying to predict what fans may want rather than actually asking them directly.
In summary, there are many benefits to an aggregated approach for all parties involved especially now that the technology is available to do it. However, it is not a short cut and a way for clubs to opt out of their responsibility to focus on their own data strategies, the individual club’s commitment to this approach is vital.
